Developing and Retaining a Skilled Workforce in Wisconsin

Junjie Guo and Ananth Seshadri

Executive Summary:

• Wisconsin’s working-age population is less likely to hold a bachelor’s degree (35.4%) than the nation as a whole (37.3%), and the shortfall is proportionally larger in computer and information sciences (1.2 versus 1.6%) and engineering (2.7 versus 3.3%), fields central to the knowledge economy and the age of artificial intelligence.
• The shortfall is not a failure of the educational pipeline. Wisconsin matches or exceeds national rates of high-school completion, college enrollment, and in-state college attendance.
• The binding constraints are demographic and migratory. Wisconsin has a relatively older working-age population and a steeper projected decline in high-school graduates than the nation, and it attracts far fewer skilled workers from other states: 40% of its college-educated workforce was born out of state, compared with 57% nationally.
• Wisconsin retains 56.5% of its college-educated natives, slightly above the national average, but retention is weaker for STEM graduates (50.8%), and it lags comparable states in retaining master’s and PhD graduates, particularly in STEM.
• Graduate retention varies widely across UW campuses. The largest comprehensive campuses — UW–Milwaukee foremost among them, at 86.0% — deliver most of their graduates directly to Wisconsin employers, a strong return on the state’s investment. The flagship, UW–Madison, retains 54.7% of its graduates at one year and 40.8% at ten — among the lowest in the system at the ten-year mark — so the state loses the majority of each flagship class within a decade.
• Much of this owes to a deliberate expansion of nonresident enrollment, now 47% of its graduates, who remain in Wisconsin at roughly a quarter the resident rate; because of its scale, Madison is nonetheless the largest single source of retained graduates of any UW campus and, given its national and international reach, contributes graduates to both Wisconsin and labor markets across the country.
• Wisconsin college graduates earn about 6% less than observably similar graduates nationally. This gap is widened by the state’s above-average income tax rate. The state’s lower cost of living currently more than offsets the gap in real terms, though this advantage reflects housing costs rather than policy design. Policy should prioritize competitive earnings and after-tax income, stronger links between UW graduates and Wisconsin employers, protection of the state’s cost-of-living advantage, and greater understanding of the extent to which nonresident students remain in Wisconsin.